---
Title: "What Is Customer Churn? Definition and Churn Rate"
Url: "https://computer.io/glossary/customer-churn"
Topic: "Metrics"
Description: "Customer churn is when customers stop doing business with a company. Definition, churn rate formula, example, common causes and how to reduce churn."
---

# What is customer churn?

Customer churn is when customers stop doing business with a company, such as canceling a subscription or not renewing a contract. Churn rate is the percentage of customers lost in a period: customers lost divided by customers at the start of the period, times 100.

## Formula

Churn rate = (customers lost ÷ customers at start) × 100

Example: 1,000 customers at start, 40 cancel → 4% monthly churn.

## Types

| Type | Example |
| --- | --- |
| Voluntary | Customer cancels |
| Involuntary | Failed payment |
| Revenue churn | Downgrades and cancellations |

## Common causes

Poor onboarding, unresolved issues, weak value, better competitor offers and price.

## Reducing churn

Monitor health scores, act on warning signs, fix repeated support issues and run proactive check-ins.

## FAQ

### What is a good churn rate?

It depends on the market; B2B SaaS often aims for low single-digit annual churn for enterprise customers.

### Can AI predict churn?

Yes. Models can flag at-risk customers from usage, support and sentiment data.

### What is the difference between churn and retention?

Churn is customers lost; retention is customers kept.

## Related terms

- [Customer retention](https://computer.io/glossary/customer-retention)
- [Customer health score](https://computer.io/glossary/customer-health-score)

## How Computer helps

- [Customer agent](https://devrev.ai/solutions/customer-agent)

## Further reading

- [Customer churn rate](https://devrev.ai/blog/customer-churn-rate)
- [Ai churn prediction](https://devrev.ai/blog/ai-churn-prediction)